Good day forex traders.
It is time for a review of the AUD/USD. It has been a ride so far with the bearish trend. Did you catch the train from the top?
In the previous AUD/USD forecast we noted that the currency pair was bearish for the week despite a momentum towards 0.74. It ended the week testing the resistance turned support level of 0.72. We were made aware of the failure to sustain bullish price action and hence the need to factor in the bearish undertones in our trades.
Looking at the AUD/USD weekly chart above we noted that the currency pair had a rather undecided week. It ended in a slightly bearish doji below 0.72 and the middle bollinger band.
From a technical point of view, the week ahead will be crucial. The currency pair is resting upon the upper trend line region of the main bearish channel. A clear dip below it will indicate the possibility of a return to the bearish momentum.
Global Trade War Continues
The global trade war continues to be a drag on risk appetite, depressing sentiments. With the arrest of Huawei’s Chief Financial Officer, there is concern that the ongoing US China trade talks may take a turn for the worst. The US appears to stand ready to add on to the tariffs, making the situation uncertain.
Late last week, China released worst than expected economic figures. Retail sales came in at 8.1% instead of the expected 8.8%. I mentioned that retail sales is an important indicator of economic health and hence sentiments were probably dampened. The Australian economy is closely intertwined with China’s and hence the Australian dollar is likely to be affected too.
Week Ahead Calls For Caution
The week ahead is dotted with important economic data releases. The US Federal Reserve is due to meet for the last time and many expect that the interest rate will be hiked bringing it to a total of four times this year. There is concern though for the schedule of interest rate hikes for 2019. It was expected to be three but recent dovish developments brought apprehension that it may be two instead. This will probably have a negative impact on the sentiments towards the US dollar as high interest rates are often favoured by investors.
The Australian employment change and unemployment rate figures are due to be released too. This is a situation where better than expected figures will probably delight while worst than expected figures will likely inflict damage on sentiments. Employment is an important gauge of economic health.
There are other economic releases too and hence it is always good to monitor the economic calendar. Members can log in to their dashboard to conveniently view it together with the forex heat map for momentum tracking. Proper money management should be practiced at all times!Have you checked out our membership subscription? Enjoy your own member dashboard with exclusive premium analysis for as low as less than $0.20 a day! Time Limited Promotion 30% OFF. Secure Discounted Rates Now.
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